Social Capital Management in Iranian Knowledge-Based SMEs

The role of knowledge-based SMEs, particularly high tech SMEs, in the development of the society and their surrounding environment requires them to develop an organizational social capital that can help them to gain more potential market opportunities and to achieve and sustain their competitive advantage. The importance of social capital and its effective management approach in organizations, particularly knowledge-based organizations, for assuring their ongoing and sustainable development and competitive advantage has been a matter of serious discussion in recent years. Considering the recent expansion and growth of knowledge-based SMEs in Iran and the role and importance of their social capital in further development of Iranian society, an effective system of management of social capital of these enterprises is a matter of concern of their top managers. Therefore, a blend (quantitative and qualitative) multiple case study was conducted with a selected number of SMEs to assess their existing social capital, to identify factors which might have positive or negative impacts on the promotion of their social capital and to propose an effective approach for its management. To conduct the study, a purposive sample of sixteen R&D, consulting and training SMEs was selected. To collect the data, a stratified random sample of 192 staff members (knowledge workers) and managers of the selected SMEs were given a 24-item questionnaire which was designed based on three dimensions (structural, relational and cognitive) of Organizational Social Capital Model used by Nahapiet and Ghoshal in their study. This was followed by semi-structured interviews with a selected number of research participants for completion and further clarification of collected data. Findings indicated that the selected knowledge-based SMEs are not benefiting from a desirable social capital and, therefore, some measures need to be taken to improve the situation. Based on the findings of this study, suggestions were provided for the promotion of their social capitals and their more effective management.